Skip to main content

About this Show

Capitol Hill Hearings

News/Business.

NETWORK

DURATION
05:00:01

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 91 (627 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 24, America 15, New York 15, U.s. 13, Mr. Hoyer 6, Mr. Mcgovern 5, Boehner 5, Mr. Woodall 4, Mr. Walz 4, United States 4, Washington 4, Google 4, Mr. Becerra 3, Mr. Clyburn 3, Walz 3, Ms. Pelosi 3, New Jersey 3, California 3, Massachusetts 3, Sandy 2,
Borrow a DVD
of this show
  CSPAN    Capitol Hill Hearings    News/Business.  

    December 13, 2012
    1:00 - 6:00am EST  

1:00am
multimillion dollar investment. we start here and now by passing the middle class tax cut. all we have to do is take up a senate bill. it's right there. noigs that we ought to really take up the violence ainst women act from the senate. not the house bill. the house bill did not include numbers of women in amica under this act, native american women, gay women, immigrant women and we couldn tolerate that. let's take the senate bill and pass it that bill has reduced domestic violence 67%. we need to reduce it 100%. but we cannot do with that -- without that. the farm bill spornt. look at some more of that but we need absolutely, i cannot say it enough, soing many people this morning made that point clear, we can and i know
1:01am
that numbers of republicans want to do this in a bipartisan way, we can do what we've already agreed on that is that the middle class should not have a tax increase but that the rich every people in this clint, that's what the country was founded on, should be paying their fair share. and there's simply no reason for this delay. once those tax cuts are passed andy can move on to countless other issues i've already mentioned that demand our attention. we can extend unemployment insurance. it's set to expire on january 1. it will affect millions and certainly affect our economy. we can give support to millions of americans struggling to recover from hurricane sandy wefment can begin an open deba as i said on the violence against women act. historians have said that this term of congress, these last two years, have been the least productive in american history. that is not anything to be proud of but the majority seems to be intent to keep that
1:02am
title. they spent two years taking vote after vote to repeal health care and even more time to make sure that the $4 billion subsidy to the big oil companies stays intact. it's shames will and we need to do more than that. the people who sent us here deserve more than that we should not be crying out in the wilderness to work, we have been sent here to work and we need to get down to it. in the final hours of this congress and we have the threat of working christmas, if we have to do it to get things done, i'm willing to do that, but the majority should help solve the nation's most pressing issue, that's why we're here. do not activelyhoose to leave the work unfinished. as we silt and wait for gos on the fissclaldeliff, the other -- there is other legislation that's ready that could be done now, could help our markets, relieve the mind of employer, could give security to the middle class and people below that and we certainly ought to be doing it.
1:03am
today's rule simply does the following. all we're doing now at this minute is we're giving the majority the freedom to spend the rest of this month and the rest of this year on minor, noncontroversial legislation. i refuse to give this blank check to a majority that has yet to show any interest in completing the outstanding work. i urge my colleagues to join me in opposing today's rule so we can try to get back to d -- get back to work. today shoulbe the day, this wednesday, very day, should be the day that we star doing our job to provide real solutions to those with real problems of those we represent and i reserve the balance of my time. the speaker pro tempore: the gentlelady from new york reserves. the gentleman from texas. mr. sessions: thank you very much. the gentlewoman makes a number of good points -- points. we did pass in the house the violence against women act that passed may 16 of this year,
1:04am
222-205. the house has passed, by the way, 256 of our colleagues to 171 what's tchailed job protection recession prevention act and it was passed on august -- ms. slaughter: will the gentleman yield? mr. sessions: i will in a second. it would have extended all current rates and compelled congress to enact meaningful tax reform in 2013. we passed this. we said we ought to do what we should do. and that was back in august and i would yield to the gentlewoman. ms. slaughter: thank you, mr. sessions. i know you, i know tt you understand, i've talked about thisbut that bill that passed this house excluded a large number of the women basically what this house said with that vote was go ahead and beat them up. we don't want them covered. after the election, after what everybody has been through after what the american plic thinks about what large number ofur cohorts believe here, surely to goodness you would
1:05am
not recommend that that bill become the life of the land. mr. sessions: reclaiming my time -- ms. slaughter: we are asking to take up the senate bill that covers all women. mr. sessions: reclaiming my time. appreciating the gentlewoman, we'll be engaged in these debates, have been in the past and will be in the future. i think the gentlewoman makes a good point. we offered this bill, debate it, passed it, we're waiting for the senate to get to the point where we can get to conference. that's how this thing works. we're not going to take the senate bill and pass it, we passed our bill. if we can get conference where the senate and house get together and they resolve t differences, then we can bring it bk anwe'll have a bill. that's supposed to be how this place works. it's not where we pass our bill and then all of a sudden we decide we're just going to take the senate bill and repass it and negotiate with ourselves. i think what we need to do is stick to what we understand and
1:06am
that is that we're waiting for the senate to come and do business with us. mr. speaker, at this time, i would like to yield five minutes to a young new member of the rules committee, the gentleman from georgia, mr. woodall. the speaker pro tempore: the gentleman is recognized for five minutes. mr. woodall: thank you, mr. speaker. i thank the gentleman from texas for yielding. he'll be our chairman next year, i'm looking forward to his leadership. we're setting the tone for what's going to happen next year. i said all through the fall, mr. speaker that this was going to be that opportunity we were going to have to kind of define where this congress was going to go for the next two years. i say to my friend from new york for whom i have great respect and who i have enjoyed working with on the rule committees for two years, mr. speaker, that this rule today does exactlwhat my constituents back home have asked me to come back to washington to do. the gentlelady cited bill after bill after bill that i have been proud to support to try to
1:07am
rip the president's health care bill out by its roots. we have worked hard on that the senate hasn't cooperated with us, the president hasn't cooperated with us, so we weren't able to get that done. this bill says let's move beyond the controversial topics, let's move beyond the topics we know we could jam through. there's a republican majority, we could yam through any piece of legislation we wanted to jam through. but this rule says this is not the way to finish out this year. this rule says we need to grab each piece of legislation that has bipartisan support, grab each piece of legislation that folks have been laboring on for two years, they've brought together a consensus around and let's pass those things. i think that's fantastic. i think that's fantastic that every single bill members have been investing their energy in, they've been able to -- they'll now have a chance to move to the floor. my frustration is, what about the bills we've already worked on here in a bipartisan way
1:08am
that have yet to be taken up on the senate side? i heard from think constituts in a town hall meeting last night, they said why do you always putverything off until the last minute? why didn'tou deal with the sequester earlier in i said, you mean like back in may when the u.s. house paed the only sequester replacement bill to be passed in this town. back in may. they said maybe that takes care of the sequester problem. think said what about the tax rates? i said what about in august new york a bipartisan way, we passed a bill, in this house, to extend current tax rates, to prevent tax rates from going up. i took another question from up with of the folks who said, but what about that senate bill people keep talking about? what about the senate bl? why won't that get a vote in the house. i said actually quite unusual in the rules committee you don't see it often but rules
1:09am
committee waived all the points of order, took all the roadblocks out of the way, in an unprecedented way to allow what we called the levin amendment, which was basically exactly the plan the president has been pushing, to raise toongs family-owned businesses, to punish job creator well, took that vote on the house floor. i'm proud to say that again in a bipartisan way republicans and democrats came together, rejected class warfare and said let's get behind a program that expands the economy for everyone. and we passed that tax bill back in august. then again in september. worried about this defense sequester that's coming up, we took up the bill from the gentleman from florida to say how can we deal with these defense sequestrations in a responsible way? i back to may when this house did its work, i go back to august when the house did its work. i go back to september. there is proposal after proposal after proposal that as the gentleman from texas said, could take to conference
1:10am
tomorrow. and if i could ask the gentleman from texas because you know better than i, i know this rule allows for suspensions to come to the floor but what about that? what about when the senate decides to get to work and takes up the companion legislation and the bills we passed in the house will we be able to move to go to conference here in the body? mr. sessions: i appreciate the gentleman engaging me, there is nothing in this rule to eclude us taking a conference report or any business on what we might calregular order that would require a rule to comeorth. mr. woodall: the gentlelady talked about important pieces of legislation coming to floor, if the house appoints conferees and the senate appoints conquer foo -- confer quees, we could bring every piece of legislation to come back to the house that she has on her agenda. mr. sessions: the gentleman is correct and we expect those.
1:11am
mr. woodall: this is the kind of house, deliberative house, i came to be part of two ort years ago. we have the ability to get these things done in the next few days. i reject the idea that i read over and over again that this house has been delaying action this house got it right wetch got it right in a budget in april of 2011, we got it right in our budget in 2012, we got it right when we passed aest sequester replacement and we're getting it right with this rule today. with that, i yield back the balance of my time. the speaker pro tempore: the gentlelady from new york. ms. slaughter: i'm pleased to yield one minute to the gentlelady from california, our leader, ms. pelosi. the speaker pro tempore: the gentlelady is recognized for one minute. ms. pelosi: thank you very much, madam chair. ranking member. thank you, mr. speaker. why did i sort of smell smoke when i heard this debate? it's reminiscent of nero fiddling while rome burned.
1:12am
the american people are waiting for us to get the job dobe here, not to make a myriad of excuses about why stuff hasn't been done. you're bringing up a rule that says we should take -- have suspension authority. let's bring the middle income tax cut up under suspension. i believe and i am willing to take the chance that this house would give over 2/3 of a vote to middle income tax cuts. a tax cut which gives -- do i detect your smirk to mean you don't think republicans won't vote for middle income tax cuts? should i take it to mean you will continue to hold middle income tax cuts hosstanl, giving tax cuts to the wealthiest people in our country? the unfairness of it iappall, the fact that it increases the
1:13am
deficit is disgraceful. and that it does not change -- create jobs is a big mistake for us to make. what we are asking for in this rule is to say no to the previous question so that we can take up a rule that says that we cannot leave here until we -- until and unless we pass the middle income tax cut. whatever else happens on the whole myriad of other issues that relate to the cliff. this matters, what happens here. it matters that we get a job done. it is relevant to the lives of the american people. as we gather here, we, a country of great family traditions, of family values or of commitment to faith, faith in ourselves, our families and our god, our country, areway from home while people are lighting a menorah candle, a
1:14am
hanukkah candle, while people are trimming trees and the rest of that. ok, we're here to do our job but we we hear from the republican side that they might not be ready to relieve the pain and curiousity of the -- that the american families have about whether we're going to get this done. . whether the markets will have confidence how to grow the economy and create jobs and remove all doubt, remove all doubt in the full faith and credit in the united states of america. every time you come to this floor it's a question, why are we here? we are here to do the people's work. let's sit down. get it done. and move forward. instead of filling the agenda however worthy some of those initiatives may be, instead of
1:15am
not along with passing a middle income tax -- th is also reminiscent of a year ago. the president proposed, the house and senate, democrats and repuicans, voted for the payroll tax holiday. the republicans in the house resisted. painted themselves into a corner until they had no choice. the issue had been made too hot for them to handle and they finally had to come around to supporting the payroll tax holiday. and here we are again. 100% of the american people will receive a tax cut when we pass the middle income tax cut. the wealthiest people in our country will receive a tax cut up to their income of $250,000. we are asking them to pay a little bit more for what they make over $250,000 a year. to help reduce the deficit, to
1:16am
help grow the economy, grow the economy. that growth is what is essential. you want to reduce the dicit, create jobs. why aren't we doing that? why aren't we just having all this subterfuge and this, that, and the other thing? why are we being told make a reservation christmas eve and one on the day after christmas to come back? is there not an appreciation for the jewish holidays, christmas holiday, kwanzaa, all the days families come around, bonding rituals, important to the strength of our society, do we not care about that? the american people do and they want to shop for it. they want to have family dinners and they want to exchange gifts as is the tradition, but they really don't know if they are going to be able to pay the bills in january that they --
1:17am
for the purchases in december. the president has been very clear, democrats have agreed to $1.6 trillion in cuts. much of it voted on -- all of it voted on already either in the budget control act or in the -- other actions taken by this congress in the course of this congress. we have already taken up -- savings of over $1 trillion, redirected savings in medicare to prolong its life and to increase benefits. that would be a $700 billion in the affordable care act, and another another $400 billion in the president's budget. we are committed to that. where are the tax cuts? where are the tax cuts for the
1:18am
middle class that would inject demand into the economy and would therefore create jobs and create growth? where are the revenues that we would get if we did that and then had the additional participation of those who make over $250,000? where is the revenue that the republicans are willing to bring to the table? all we have seen from them is a letter. all we have heard from them is they don't want to tax the rich. all we knois that the public is very much onboard with everyone in our country paying his or her fair share. so this rule today that says give us authority to have other bills brought to the floor, well, one of those bills is the middle income tax cut, we are happy with that. but if that isn't the plan, then i urge my colleagues to vote no on the previous question because
1:19am
that will then enable to bring a rule to the floor which calls for bringing forth the middle income tax cut before we leave here. again, we support the president and his proposal, which is fair, which reduces the deficit, which creates jobs, and which will work for the american people. with that i yield back the balance of my time. thspeaker pro tempore: the gentlelady's time has expired. gentleman from texas. mr. session: thank you very much, mr. speaker. with great respect to my dear friend, the gentlewoman from san francisco, and the minority leader, i'm delighted that she came down to engage us on this very important issue. the gentlewoman does recognize and know that the house on august 1, in fact, did exactly what she has suggested that they, and that is to take action on what the future tax rates
1:20am
would be in this country. and on a bipartisan basis, 256 -171, this house of representatives said, let's understand that now is a bad time to raise taxes on the american people. and let's extend for a period of time all the tax cuts which allow america to keep working. we passed it 256-171. mr. speaker, i'd like to ask unanimous consent that i insert into the record a chart that exists on the house budget committee that shows the choice of the futures, and what future was presented, if i could -- thank you very much. this slide that i've g that's on the use budget committeele is essentially about the current
1:21am
pathway the president would choose as outlined in his budget that t gentlewoman, ms. pelosi, spoke of that got no votes in the united states senate. not one vote. no votes here. the plan that the president has presented which would substantially -- not just raise taxes but substantially raise spending, if you isolate the president's ideas of simply raising taxes on the -- whatever he calls the top 2% or those that have a household income of $250,000 and above, what you essentially do, mr. speaker, is very quickly lose 700,000 american jobs. and that's the answer that this administration fails to include in their talking points.
1:22am
that there is a huge impact. part of that impact, mr. speaker, comes from the problem where dividends, dividends, are those -- that money that comes back as a result of an investment, would rise essentially from 15% to whatever a person's top tax rate is. meaning it could go at least under the scenario that the president wants to 39%. that means from 15% to 39%, that window, that value in between, is what people reinvest in their companies. they reinvest that, many times, in small business, and that's the job creation element. when you make this rate go up, you arbitrarily take away some 700,000 american jobs that need
1:23am
current capital every day, a sml business owner reputting that money, reinvesting that money for the life of their business. and this is the part that we believe, as republicans, that we stand on the side of saying we shouldn't lose american jobs just for the sake of fairness. of wha the president, what the minority leader is now arguing for of increasing taxes. he so it's obvious to republicans that -- so it's obvious to republicans what we believe we stand for is creation of jobs and making sure that that capital that's invested in the economy continues. i reserve my time. the speaker pro tempore: the gentleman from texas reserves the time. the gentlelady from new york. ms. slaughter: mr. speaker, i'm pleased to yield three minutes to the gentleman from south carolina, the assistant democrat leader, mr. clyburn. the speaker pro tempore: the gentleman from south carolina is recognized for three minutes. mr. clyburn: thank you, mr. speaker. i request permission to revise
1:24am
and extend. the speaker pro tempore: without objection. mr. clyburn: i thank the gentlelady for yielding me ts time. mr. speaker, when the so-called supercommittee failed last year to overcome the obstruction of the tea party republicans and their leader, grover norquist, to achieve a fair and balanced plan for deficit reduction, economic growth, and job creation it would take a decisive national election to settle the matter. i believe president obama's victory on november 6 was very decisive and pretty definitive. during the campaign president obama very clearly laid out his vision and the american people strongly affirmed his position. the president won all but one of the swing states. 62% of the electoral college, and carried the popular vote by more than 4.5 million votes.
1:25am
democrats added to our numbers in the house and senate, and captured the house popular vote by more than a million votes. in february of 2010, president obama began the process to reduce our deficit by establishing the simpson-bowles commission. nce that time, many bipartisan groups have made recommendations on how to reduce th deficit. and they have all been in agreement. you need a balanced deal that requires shared sacrifice from all americans, including the wealthy. in 2011 we began to reduce the deficit, but we did it entirely through spending cuts. over $1.5 trillion and have
1:26am
asked nothing of the most fortunate. in 2012he americapeople spoke. it is time for balance and shired sacrifice, and the first step i to allow -- shared sacrifice, and the fsttep is it to allow the bush tax cuts for income over $250,000, to expire. but that is bait for another day. now we must do what we agreed on . extend the tax cuts for everyone on their first $250,000 of income. the proposals put forth by the republicans sce the election and their refusal to extend the middle class tax cuts, which we all agree should be extended, are justmore of the same obstructionism. the time for posturing is over. it's time for house republicans
1:27am
to accept the express will of the american people and get beyond their pledge to a special interest lobbyist here in washington, d.c. although, frankly, i fail to see how avoiding to cut taxes violates the pledge to never raise taxes. we need to defeat the previous question. thank you. the speaker pro tempore: the gentleman from texas. mr. session: thank you, mr. speaker. mr. speaker, i'd like to remind the gentleman that the republicans have already passed the bill for the middle class tax cut on august 1 of this year and passed 256-171. we are now waiting for the senate to act on that. i reserve my time. the speaker pro tempore: the gentleman reserves his time. the gentlelady from new york. ms. slaughter: mr. speaker, i yield two minutes to the gentleman from california, the vice chairman of the democrat caucus, mr. becerra. the speaker pro tempore: the gentleman from california is recognized for two minutes. mr. becerra: i thank the
1:28am
gentlelady for yielding. if you're in the middle class, shouldn't it feel like you're in the middle of america? yet the politics of extremism is pushing the middle classo the very edge. the very edge. our house republican colleagues continue to ignore the calls from the american people to extend middle class tax cuts now . that politics of extremism is threatening to raise taxes on the middle class by the amount of about $2,200 starting january 1. republicans should once and for all join with democrats and the american public to bring the bipartisan senate-passed middle class tax cut bill to a vote on the house floor. .
1:29am
97% of small businesses don't see a single tax increase next year. democrats and 2/3 of the american people agree with the growing number of republicans who are telling the republican colleagues, take the 98% deal. take the 98% deal. my friends, this is not the time to put the foot on the economic recovery that we're beginning to experience, foot on the brake of the economic recovery. it's time to get our work done. remember, colleagues, where we were four years ago. four years ago, november, 2008, our country was hemorrhaging 800,000 american jobs. this november, we got the news 146,000 new jobs. it's time to continue that progress. let's stop abide big pledges to
1:30am
special interests and start abiding by our pledge to the united states of america and the people who elected taos serve the interest of all americans not those of special interests. let's pass the middle class tax cut bill now. >> the -- the speaker pro tempore: the gentleman's time has expired. the gentleman from texas. mr. sessions: i'd le to just make sure that the speaker that was up here, mr. becerra, understands that on august 1 of this year, we passed a bill to extend tax cuts for the middle class. 256-171. we've done that. it's now awaiting senate approval. i reserve my time. the speaker pro tempore: the gentleman from massachusetts. >> i'd likto yield three minutes to the democratic whip, mr. hoyer. the speaker pro tempore: the gentleman is recognized for three mins. mr. hoyer: i ask unanimous consent to ethheth -- to revise
1:31am
and extend. the speaker pro tempore: the gentleman is recognized. mr. hoyer: i thank my friend for yielding, i want to thank the chairman of theule -- rules of -- rules committee for his efforts as well. ladies and gentlemen, we talked a lot, correctly, about creating certainty. alleviating uncertainty. alleviating angst among our people and among our economy. we have an opportunity to bring certainty to a large segment of american that -- segment of america that they will not receive a tax increase on january 1. we have that ability because the united states senate has acted on a bill which will allow us to do that. even if we don't take their bill up, we could take a bill that tim walz has introduced, congressman walz has introduced a bill which will say to the 98% that we've talked about you won't get a tax increase.
1:32am
i think that we have agreement on that across, as the gentleman from texas indicated, we have agreement on that i think there's not anybody here or very, very few at least, on either side of the aisle who doesn't say that those who are making $250,000 or less as milies or $200,000 as individuals or less, shouldn't get a tax increase. now there are some who say that those above shouldn't get a tax increase either, i understand that, but we have disagreement on that the american people are frustrated by the fact that even that on which we he agreement we can't move. they understand we have policy differences. but they're hopeful that when at least we have agreement on an issue we can move it. if we did so, think of the confidence and mr. cole, former -- had your job as chairman of
1:33am
the campaign committee, said let's pass this. let's give the middle class, the working people of america a christmas present. a sense of certainty a sense of self-confidence, a sense of well being that would be good for our economy but certainly good for theindividually and as families as well. so i would urge my colleagues on the republican side and my colleagues on the democratic side vote against the previous question. that's somewhat esoteric. people say what's that mean, vote fens the previous question. that's some political jargon they quse in washington. what it means if, if we vote against the previous question, we will be empowered to bring forward the middle class tax cut bill. and we'll put it on the floor and mr. walz will be our leader
1:34am
on this pause he's put it in the hopper. may i have 30 additional sends? ms. slaughter: i yield the gentleman another minute. mr. hoyer: we'll put that on the floor and every member of this house, all 433 of us here, 435 members will have the opportunity to say to the american people, yes. yes, on december 12, we're going to tell you that on january 1, your taxes will not go up. give us that opportunity. give us that opportunity to say, yes, to the american middle class. give us the opportunity to say yes to certainty in our economy. give us the opportunity to say yes, we agree on something and aren't you proud of the fact that when we agree, your congress can act.
1:35am
let's say yes. vote no on the previous question and then vote yes for the middle class. and i yield back the balance of my time. the speaker pro tempore: the time of the gentleman has expired. the gentman from texas. mr. sessions: i do apprecia the gentleman, my dear friend from maryland, who i have not only regular conversations with but enjoy very much, i would once again remind the gentleman that on august 1 of this year, we passed 256-171, an idea that would be about not losing 700,000 jobs by doing it the way that our friends the democrats want to do it. mr. hoyer: would the gentleman yield for a second? mr. sessions: i yield for 15 seconds. mr. hoyer: it's never wrong to do the right thing twice. mr. sessions: reclaiming my ti, it is wrong to lose 700,000 more job.
1:36am
that's the practical effect. the gentleman also, the minority leader was here, wanned to talk about, our speakers all day want to talk about sequestration. sequestration came as a result of a promise a deal, and a -- an agreement that we as republicans and house and senate and the president adepreed upon that we would come to an agreement upon how to cut some spending. the president said it's essential. now they want to back away from the deal. here's what their deal is. their deal is, among other things, mr. speaker, i'd like to ask unanimous consent that i include in the record a statement from the gentleman, mr. am graves who is chairman of the house committee on small businesses, e new taxes that will take place. here's one we know will happen already under law is that medicare dish payments paid to qualifying hospitals that serve low income patients wl be reduced by 75% starting october
1:37am
1, 2013. -- october 21, 2013. in addition to the $700 billion that will be transferred away from senior care. i know we have an election where we talked about and one person tried to explain, that's not really right. those re to a certain group of people that may be rich. put right here, to low income hospitals. that means we're going to have hospitals that no longer will serve seniors because their payment rate got cut by 75%. tax increases, tax increases on health care. tax increases as we learned yesterday or last week when it was announced that all insurance plans will now be paying an extra $63. those are passed on to customers, consumers. this is an outrageous government takeover of health
1:38am
care and now what they want to do is diminish another 700,000 jobs. no, sir, we're not going to fall victim to that. i reserve my time. the speaker pro tempore: the gentlelady from new york. ms. slaughter: let me yield myself two seconds to say it is not a government takeover of health care. it will be performed by private insurance companies an i'm deliked to yield two minutes to my colleague and gentleman from new york, mr. crowley. the speaker pro tempore: the gentleman is recognized for two minutes. mr. crowley: thank you, mr. speaker. ladies and gentlemen of america, this is not a mirage. we are actually here in this building, the u.s. catal -- capitol, america, your congress is in session and we're here to work. yet my republican colleagues refuse to bring up the middle class tax cut bill that is right behind me at this desk. now my colleague from texas can continue to talk abouthat
1:39am
happened in august of this year. you know, staging votes for the election, that took place. i know the results of the election. when o constituents are concerned -- what our constituents are concerned about is what happens in january, if and when we fail to do our work here now. and also, to expose that the vote that took place in august was a vote to continue the bush er tax cuts. the very same tax cuts that got us into the mess we are in right now. and they're doing that because they're holding hostage the 98% of americans who receive a tax cut under . walz's bill before -- that's at the desk today. and they're holding them hostage to make sure that the 2%, the wealthiest 2% don't get that tax cut. our economy is 70% driven by
1:40am
con -- is consumer driven. that means we -- when the middle class spends more, we all benefit. when the opposite takes place, when they spendless, we all are worse off for it. holding the middle class hoage by threatening to raise their taxes not only hurts the american families but it also hurts america's businesses. i think we owe it to our constituents to take this one sickle vote, one vote to ensure the middle class won't be held hostage any longer. one vote to give the them the economic certainty they so desperately need now. one vote to keep our middle class spending and investing and creating jobs for american businesses. but we can't do that, ladies
1:41am
and gentlemen of america. unless our republican colleagues allow mr. -- for mr. walz's bill, which is at our desk right now behind me up for a vote on this floor. that's why i will vote against the previous question so we can come back and have an opportunity to include mr. walz's bill in that package. we're here, we're ready, let's vote. the speaker pro tempore: the time of the gentleman has expired. the chair reminds members to address their comments to the chair. the gentleman from texas. mr. sessions: the gentleman from new york, a dear friend of mine, got something wrong. what we're trying to extend is the law that president obama signed into law as a result of bipartisan action two years ago because two years ago, and the economy was better then than it is now, we were trying to extend the tax cuts that president obama was asking us to do and that's what we sily did in august. so it is a president obama last
1:42am
signed bill that we are trying to offer an extension of. i reserve my time. the speaker pro tempore: the gentlelady from new york. ms. slaughter: mr. speaker i'm pleased to yield two minutes to the gentleman from minnesota, mr. wauleds. the speaker pro tempore: the gentleman is recognized for two minutes. mr. waums: thank you mr. speaker. -- mr. walz: thank you mechanic. -- mr. speaker. my discharge petition at the zesk a discharge petition the american people spoke loudly in. we faced an election and the message is clear to me, why do you continue to bicker and make these ka bouquet dance statements with one another when it shouldn't be that difficult. we came out of a constitutional convention, when i asked james madison what the secret to this new government was, compromise, compromise, compromise. to sit here and do what we're doing, not bringing this forward and releasing the tension on the middle class, making sure the economy knows
1:43am
there's ability amongst taxes, is holding our economy back. it's insulting to the american people. s that nation that won two world wars. this is a nation that split the atom. this is a nation that put a man on a moon. this is a nation sending pictures back from mars and curiosity. sign the discharge petition, bring it to the floor, get 435 votes, put it online for 24 hours, send it to the president and by tomorrow a big chuck of the fiscal cliff is done. don't insult the people with things that aren't true, dot tell them it's not about compromise and don't sit here and pretend like we're working when we're not. they know better, they're smarter, they know. give the american people what they want. stability and a congress that works and let's move on to other pressing issues. i yield back. the speaker pro tempore: the gentleman's time has expired. the gentleman from texas. mr. sessions: i reserve. the speaker pro tempore: the gentlelady from new york. ms. slaughter spm i'm pleased
1:44am
to yield two minutes to the gentleman from new jersey, mr. andrews. the speaker pro tempore: the gentleman is recognized for two minutes. mr. andrews: i ask unanimous consent to revise and extend my remarks. the speaker pro tempore: without objection, so ordered. . mr. andrews: there is a lot of disagreement about the future of our country. there is disagreement over how to handle spending, what should be cut, what should be reduced, what should be increased. there is disagreement over how much and when to raise the debt ceiling. these are very important questions. there is a disagreement over whether taxes should or should not go up on income over 250,000 a year. our friends on the other side in good faith believe it's a bad idea. we kw the economic history tells us that the last time the rates were at the level of 39.6%, 600,000 new businesses were formed and 23 million new jobs were created. we think it works. but there's something that everyone says they agree on. and that is that income up to
1:45am
$250,000 a year should not have a tax increase. everyone oboth sides says that when january 1 shows up on the calendar, there shouldn't be a tax increa on the middle class people in this country. that their first paycheck in the first five days of the new year should not have more taken out of it. so as not to hurt our economy or those families. we all say we agree on this. it seems to me the right course is to put a bill on the floor that says exactly that. that says that for income of less than $250,000 a year the tax rates for everyone american should stay where they are now and there should not be a tax increase. my friend from texas says that the majority did that in july. that's not quite right. what the majority did in july was to keep the rates low for people making less than $250,000, but also keep them low
1:46am
for people making more than $250,000. we just don't agree with that. why don't we take the 98% that we agree on and vote on it right now. i would ask for 15 more seconds. ms. slaughter: i yield the gentleman 30 seconds. mr. andrews: i thank my friend. if we don't do this, 19 days from today, 98% of the american people, really 100% of the american people get a tax increase. they have more taken out of their checks. and it will hurt shoppers in the stores, diners in the restaurants, it will hurt jobs across the country. so why don't we take the 98% that we agree on right now and put it on the floor right now. by voting no on the previous question, that's what we can do and should do. i yield back the balance of my time. the speaker pro tempore: the time of the gentleman has expired. the gentleman from texas. mr. sessions: reserve my time. the speaker pro tempore: the gentlelady from new york.
1:47am
ms. slaughter: i am delighted to yielthree minutes to the gentleman from massachusetts, member of the rules committee, mr. mcgovern. the speaker pro tempore: the gentleman from massachusetts is recognized for three minutes. mr. mcgovern: thank you, mr. speaker. i thank the ranking member on theules committee, ms. slaughte for yielding me the time. mr. speaker, i regret that my republican friends are turning this houches -- house of representatives into a place where trivial issues get debated passionately and important ones not at all. the bill that we are talking about right now on the house floor basically gives the majority who run this house the authority to bring up suspension bills from now until december 28. suspension bills for those who don't know are bills really of not much consequence by and large. they are bills that most of the time could pass by a voice vote. last night in the rules coittee, the distinguished ranking member, ms. slaughter, suggested that instd of doing suspension bills we ought to be doing bills of some consequence. like re-authorizing the violence
1:48am
against women's act. doing postal reform. doing a farm bill. or we are talking right now is passing middle class tax cut extension. those are real things that mean real things to real people in this country. and yet we are not talking about any of those things. we are talking today about basically doing not much of anything between now and december 28. last night in the rules committee we were told, well, we are trying to negotiate a deal on this fiscal cliff. the reality is that will there are few members of this house who probably are in discussions with the white house about trying to work out a deal, but the vast majority re, democrats and republicans, are being asked to do nothing. last night we came back and we voted on a -- to approve the journal, that's all we had to do last night. to approve the journal. we haven't re-authorized the violence against women act. we haven't extended middle class tax cuts. we haven't re-authorized the farm bill. i could go on and on, but we had to come back t vote on a --
1:49am
have a journal vote last night. the time has come for us to get back to work. the election was clear. the election was clear. the views advocated by governor romney anti-republican majority were rejected. the president won comfortably, and we did -- democrats won more seats in the senate, we won more seats here in the house. i think it's a pretty clear message that the american people think that we ought to do what's right terms of balancing the budget and that is ask the donnell trumps of the world to pay a little bit more. we have already -- donald trumps of the world to pay a little bit more. we have already cut $1.5 trillion in discretionary spending. a lot of those programs help people. $1.5 trillion in discretionary spending. we have already cut and my friends are sing but donald trump can't pay one penny more. give me a break. give me a break. this is about fairness. this is about justice. this is abt doing the right thing. and at a very -- at the very
1:50am
minimum we should be debating now not suspension bills but we should be debating the extension of the middle class tax cuts. that is why we need to vote no on the previous question, to bring -- to allow us to bring this bill to the floor. my republican friends say they agree with us in the middle class tax cut, fine, let's vote it. vote overwhelmingly for it. you don't have to agree on everything to agree on something. let's give the middle class certainty. vote no on the previous question. i yield back the balance of my time. the speaker pro tempore: the gentleman's time has expired. the gentleman from texas. mr. sessions: i appreciate the gentleman, my friend, who formerly was the vice chairman of the rules committee, i'd like to remind him at when he was the vice chairman of the commtee, almost half of the 3,075 bills considered under suspension in the 110th, 11th congress were for post offices and federal buildings namings or resolutions or things just to -- like national pollenators week. what we are trying to talk about is at the end of the year since
1:51am
we are going to be here waiting for the big deal, we are going to make sure that we can take ideas that still exist and -- mr. mcgovern: will the gentleman yield? the speaker pro tempore: the gentlelady from new york. ms. slaughter: let me yield mr. mcgovern 10 seconds. mr. mcgovern: when we were in charge we were able to walk and chew gum at the same time. we have had some pretty important and substantive legislation that i'm proud of. we should talking about real things that matter to real people right now instead of just extending the suspension authority. i yield back. ms. slaughter: mr. speaker, i'd pleased to yield one minute to gentleman from new jersey, mr. pallone. the speaker pro tempore: the gentleman from newersey is recognized for one minute. mr. pallone: thank you, mr. speaker. urge my colleagues to vote no on the previous question. the message from my constituents and from the american people is loud and clear and that's to extend the middle class tax cuts now. and republicans are sily holding hostage tax cuts for 98% of americans and 97% of small
1:52am
businesses to give more takes to the -- tax breaks to the wealthiest americans. democrats have a commonsense solution and we can't wait around any longer as real proposals languish while the house g.o.p. gets its act together. spearheaded by congressman walz, the democrats filed the walz discharge petition to automatically bring to the floor the senate-passed middle class tax cuts wch the president has said he will sign immediately. and overwhelmingly members have signed this discharge petition. my point is, we don't have any time to waste. we could pass this extension of e middle class tax cuts now as we find a bold and balanced and fair agreement to avoid the fiscal cliff. but there is a consensus that we do this. so why are the republicans holding this hostage? once again, let us vote no on the previous question. let's bring this middle class tax cut up now. it is the solution. the speaker pro tempore: the gentleman's time has expired. the gentleman from texas. mr. session: i reserve my time. the speaker pro tempore: the
1:53am
gentlelady from new york. ms. slaughter: i have no further requests for time, mr. speaker. i wonder if my colleague is prepared to close. mr. sessions: i thank the gentlewoman for asking. i have no further speakers and would allow her that opportunity and then i will close. ms. aughter: thank you very much. mr. speaker, we should be doing one thing today and that's passing the continuation of tax cuts for the middle class. the american people couldn't be more united in this support for tax cut and there is no reason for delay. the senate has already passed the bill and we can take up now, it's here at the desk. members across the aisle agree, that we must not let ose middle class taxes go up. with such common ground why would the majority waste another minute before ensuring that the taxes will not go up on the middle class? the answer isn't clear to me. i can't fathom it. but if the majority won't take
1:54am
action, we will. mr. speaker, if we defeat the previous question, i'm going to offer an amendment to the rule that says two things. one, first we will pass the bill to extend the middle class tax t. and second, that we will pass legislation that will avoid the fiscal cliff and the chaos that would ensue. and i ask unanimous consent to insert the text of my amendment to the rule in the record along with extraneous material immediately prior to the vote on the previous question. the speaker pro tempore: without objection, so ordered. ms. slaughter: mr. speaker, i urge my colleagues to vote no to the previous question so that he we may put our rule on the floor. i urge a no vote on the rule. if we are unsuccessful. and yield back the balance of my time. the speaker pro tempore: the gentlelady yields back the balance of her time. the gentleman from texas. mr. sessions: thank you, mr. speaker. i want to thank my friend, the gentlewoman from new york, for this vigorous debate that we had on the floor today. mr. speaker, top to bottom the
1:55am
leadership of the democratic party has been on record here again today saying they want to increase taxes on small business. they want to increase taxes on family-owned businesses and people who get up every day and wa to employ people and work harder. small siness is the engine of our economy. and our friends, the democrats, want to punish them through taxes for fairness issues. well, i'd like to say, mr. speaker, we got a bunch of problems in this country and that's whyhe fiscal cliff, this thing is not the result of taxes, it's as a result of spending and too many people not having jobs to be able to pay in not just their taxes but to be able to sustain our economy. and so we have millions of people that are unemployed and drawing unemployment compensation. we are seeing disabilities rise
1:56am
at a rate of 16% every year. one thing which we note that just before president obama took effect, white house figures show the federal budget was $2.9 trillion. next year's estimate is going to be $3.8 trillion. this is a 31% increase in spending in just four years. we have someone as the president, our great president, who is hung up on tang and spending. what we need is a house of representatives that's hung up on jobs and job creation. the american product. entrepreneurship. creativity. competition wi the world. the ne new great ideas. not that will come from this body but from the creativity of the american people. this is what republicans are trying to keep alive in our country. the idea of self-reliance and
1:57am
working hard and taking care of people that are not just in your house but are in your neighborhood. your cities. our states, the vibrancy of our country. and we are headed over the fiscalliff after four years of leadership from this president who is running, running directly to the fiscal cliff. has even said, and secretary of treasury said, we don't mind jumping off this cliff. mr. speaker, we should not be having that kind of attitude. we should have the attitude that we are for everybody. we want to be for american trepreneurship and especially small business because it's small business, family farms, small business electrical companies, people who put their name on the buildings, creativity. people get up to go to work
1:58am
every day. that's who we are going to hurt. we are not just going to hurt them, we are going to hurt their business families. people who they have h employed, small communities, large communities, but small business which is the engine of our economy. that's really who we are going to punish. lastly, we should not do it at this time just like we should not have two years ago, but i guess we were aiming for an election at that time and now the president does not have one ahead of >> chris van hollen spoke today on the latest fiscal cliff negotiation and the economy. >> congressman van hollen said he was concerned that speaker boehner was stalling. in event comes within three weeks before the bush tax cuts are set to expire and defense
1:59am
spending cuts take effect unless congress and the white house can come to an agreement. >> listen, i'm going be really brief in my opening remark. i think the president and the democrats have two objects as we approach the fiscal cliff. number one, we're trying to accelerate what remains a fragile economy. number two, come up with a balanced approach to long-term deficit reduction. we have to deal with the long- term deficit reduction for a long-term economic growth. a balanced plan means a mix of cuts in revenue. we already agreed to over a trillion dollars in cuts but on top of that, the president proposed additional cuts along with high-income individuals. his plan has been out there, it's on the internet.
2:00am
i know people are asking for specifics, but the reality it is there. in fact, when i made my remark i held up a copy of his plan to remind people it is not that the president doesn't have a republicanthat our colleagues may not like it but it is there. so with that i will -- >> let's go around the table. so you're experienced in what is the practical deadline for the formulation of a deal, kind of a rough outline if you want to get it done before the year runs out? >> before the end of the year? you have to get something by christmas if up to practically get it done by the end of the year. >> if you want to avoid the christmas holiday problem, you would have to get it done by the end of this week? >> i would say by the end of this week is the most practical
2:01am
time. i don't assign a high probability to the end of this week, i assign a high hope but not necessarily a high probability. >> i know there is radio silence with the press but are key committee chairs and ranking members such as yourself being briefed? >> i don't know the full extent of the consultation. i do know the top leaders and some others have been kept informed, yeah. >> one last from me then we'll go to brine. how confident are you that you and other democratic leaders are mustering democratic votes if the deal affects the cost of living for social security and medicare age jilt? if boehner can get his people, can you get your people? >> we doe known what is in agreement right now but those two particular items create significant concerns within
2:02am
most of the democratic caucus for policy reasons. on the medicare age piece, we think there are far better ways to reduce medicare costs. we think we should build on the model of the affordable care act which reduces costs overall in the melt care system, not simply transfer rising health care costs on the backs of seniors. there are some provisions in the president's proposals that do it the way i suggest. i would point out, if you look at the president's budget proposal over the next 10 years it has more in the way of medicare savings than the ryan republican budget that passed the house and the senate had over the next 10 years. when the republican colleagues put these big numbers on the table just remember, the president's budget proposal, again, over the next 10 year,
2:03am
the one that was adopted before has more medicare savings. he does it in a different way than republicans. for example, he asks pharmaceutical companies to pay the same rebates they were paying in 2003 for prescription drugs. but he has more savings but he doesn't pass the cost on to the backs of seniors whose medium income is under $22,000. i would also say it has other impacts in terms of policy with interaction on the affordable care act. in terms of social security, our view is that social security needs to be dealt with on its own terms. right now the social security system is owed over $2.2 trillion. after that point in time, it can pay 75 cents on the dollar. we need to work together in a
2:04am
bipartisan way to fix that, you know, 25 cent on the dollar hole beginning in 2033. we do not believe we should take from social security as part of these deficit reduction talks. then there are other specific issues that relate to seniors who get very old because of its compounding effect it has significant affects on people's income the longer they live. >> we're going to go to brian butler. >> a lot of republicans are talking about the possibility that january 1 -- that maybe the house passes the bill but then they turn around and do
2:05am
what they want to do in terms of entitlements. are democrats ready for that? >> i think this notion that republicans are going to threaten the united states and the international economy to exact certain demands is one that the american people are not going to stand for this final. which is why the president has made clear is "not going to play that game." if you think the fiscal cliff has the potential to have a
2:06am
negative economic impact, and it does to a -- especially if you go far into january and beyond. but fooling around with the debt ceiling is catastrophic.
2:07am
2:08am
i don't think our republican colleagues are going to gain any sympathy from the american public when they are threatening to tank the u.s. economy. i know all of you understand, but i think it is important that people following these discussions recognize that lifting the debt ceiling is not to borrow money to pay for new things. it is to pay for bills that the united states has already incurred, that congress has already voted on. it would be like getting up one morning and saying we're not going pay our mortgage or it is like if we all spend on the credit card, buying things we like, then we're not going pay the bill. so for the united states of
2:09am
america to wake up one morning and say we're not paying our bills would be economic catastrophic. >> does that rule skip operative or can you see a way that they can do the heavy lifting and you can get enough votes to get it over? >> as i look through different scenarios i think the idea that the speaker may have to bring something for the good of the country to the floor of the house, that does not get a majority of republican votes may be necessary to get something done. i think the biggest impediment
2:10am
right now is the speaker's ability to get a decent number of republican votes for an agreement that most people would agree is a fair agreement. the president has been pretty clear that he's willing to make some tough compromises. he also wants to remind people that he won the election talking about a lot of the same issues we're talking about. so whatever agreement we reach needs to reflect that reality. so i think one way to get this done, and people need to
2:11am
understand we could get this done if the speaker is willing to bring to the floor of the house a bill that did not necessarily get a majority of republican votes. i'm getting concerned that one of the reasons the speaker is deciding to string out these decisions, is that he wants to wait until january 3, when the election for speaker takes place. any concerned that agreement he reaches, if it violated the so-called rule could undermine support for his cause and make it more difficult for him on january 3.
2:12am
i would hope he would put the interest of getting an agreement before house republican politics. >> we're going to go next to mac then to chris and then to lauren fox. >> be inaudible] what is the deal with sequestration? no one is talking about it. i want to get a sense from you whether these defense cuts are being addressed or talked about? whether they have a seat at the table and whether you are confident they are going to be you have set in some way or changed in any sort of fiscal cliff deal? >> yes, i think one of the reasons that the sequestration has gotten less attention is
2:13am
because the operating assumption -- more than assumption, i think the operating understanding of people involved in discussions is if you can resolve the other pieces then you can use the deficit reduction achieved from the other components, both the revenue component and the cut component to replace the sequester. whether you replace it on a 10 year basis which costs about $1 trillion or if you do it on a year basis which is about $110 billion. whatever we come up with as part of an agreement should certainly be able to offset at very least the first year of the sequester. if you can't get an agreement
2:14am
on all the issues, including the tax piece, could you come up with a smaller package to avoid the sequester? of course, that is possible but i don't know how likely. we could do that quickly if people were willing to put together a package of $110 billion in both revenue and cuts to replace the sequester for a year. >> chris? >> tell me what you think the legacy of the congress will be? we're at a brink of an economic disaster. what does this mean for where congress is heading? >> well, i think, i mean, we know the 112th congress, at least is judged by the american people and also judged by overall work product has been
2:15am
one of the least productive congress in recent history. a lot less productive in previous period, 2008 to 2010. most of it was consumed -- most of the energy was consumed on these budget issues and the reason we're here today, on the edge of the fiscal cliff is this congress, at least so far, has not resolved those big issues. that is starting with the biden talks, we obviously accomplished some savings as part of the budget control act. i want to emphasize, not people around this table but others forget, we agree to $1 trillion in cuts. 100% cuts. now we're in this position that we are now because at that time and in both the biden talks and the so-called super committee talks democrats said we want to take a balanced approach to the deficit.
2:16am
we are willing to do cuts but the composition of the cuts is something we can debate. but our republican colleagues have been absolutely refused to deal with the revenue part of the balanced approach. now we've seen some movement. although i would point out the letter the speaker sent to the white house says he wants $800 billion but still refuses to identify how they would achieve that. as of right now, i mean the president has been clear how he wants to get the revenue and the cuts. that letter from speaker boehner doesn't specify how they would get the revenue. nor does it specify how they would get the cuts with. exception of the two items that dave mentioned earlier. which by the way, don't begin to get you the $900 billion in
2:17am
mandatory spending and the $300 cuts in discretionary spending? >> i want to go back to the point that you made about the speaker needing to bring a plan to the floor of the house that the majority of his caucus wouldn't necessarily vote for. can you talk about what is happening in trying to get votes for something that may raise tax rates or folks who have taken a pledge on not raising the tax rates. >> on the republican side? >> yes. >> i don't know how it is going. there are some reports they haven't begun, we're testing different scenarios with their members yet so we don't know. the point i think the speaker should make to his caucus is that even if they are against it, they should vote against it. but that he's doing the republican party a favor, certainly doing a country a favor, but i would argue doing the national republican party a favor by allowing us to get this issue behind us. it is really clear that the american people don't like the idea that the economy is being held hostage to the fiscal cliff and middle-income taxpayers are being held hostage in order for
2:18am
republicans to get this bonus tax break on people's income above $250,000. far be it for me to give the speaker advice but there is an argument to be made to go ahead and vote against this, i'm not talking about everybody but a good chunk, maybe even a majority. let's get beyond this point and get on to other things and because as you know the biggest tax increase happens if we do nothing. that's a $5 trillion tax increase. what the president has proposed is taking $1.6 trillion of that revenue, take $1.6 trillion from high income earners but if we go over the cliff we get $5 trillion and on top of that the end of the payroll tax holiday which i believe we should continue in that form or find an alternative that has the same economic benefit going forward. according to the congressional budget office dollar for dollar the payroll tax cut does a lot more for economic growth than some of the other tax extensions. certainly, more economic benefit than extending tax breaks above $250,000. >> under the scenario in which the speaker brought to the floor that basically extended the middle class tax cuts but pretty much nothing else. are those -- under those conditions do you think democratic votes can really
2:19am
carry the day in the house? >> are you asking two questions -- right if you brought that to the floor of the house the democrats would vote for it. we called for the speaker to bring the bill to the floor of the house. we would prefer, as the president said, to try to get good night agreement that deals with a lot of these issues. you mention things that are important, the president has an influx and wants to invest in infrastructure, we would like to deal with some of the other pieces as part of an agreement
2:20am
now. but if the speaker, you know, is unable to get his members together for an agreement and wants to bring that bill before the house, democrats will support it. you raised a question about whether republicans will support it and obviously, if republicans oppose the bill i assume under those circumstances we could maybe get that passed. it is not the ideal result, obviously but it would avoid the biggest chunks of the fiscal cliff. it would extend middle class tax cuts, it will include the a.m.t. fix, those are things that are a part of the bill. i should point out that -- if republicans want to take that approach on january 1, the state tax will revert to about $1 million exception, i think it is 55% rate. what the president has called for is a very reasonable alternative which is to take the estate tax to the generous state tax benefit, you know, since early time in the 20th century which is the 2009 levels which
2:21am
called for a $5 million -- you're first $5 million of an estate no estate tax then to go back to the 45% rate that applied instead of the current 35% rate. the current provision was an incredible sweetheart deal for the wealthiest estates in the entire country. i mean, maybe, like, between 6,000 and 10,000 estates. the american people don't like the idea that the republicans are holding the middle class hostage in order to lock in tax breaks for income above $250,000. i think republicans are going to be hard pressed to hold the economy hostage in order to get these sweetheart estate tax deal for the 6,000 to 10,000 wealthiest estates in the entire country. >> i'm wondering if you could speak a little bit more about the stimulus measures and the president's proposal. i'm told they are not a priority in discussions right now. i'm wondering if you can predict the likelihood of these measures surviving in some sort of deal, or you know which of the measures will survive in some sort of deal. or what would the likelihood of these coming up later? >> sure. i think the president, actually, is very focused on trying to get important pieces of the legislation to extend the economic recovery and accelerate it. these are items taken from his jobs initiative which have been sitting in front of the house of representatives for over a year now. one is investing in infrastructure for our roads, bridges, our transit ways. if we look at the fact that we have huge unmet infrastructure needs across the country and combine that with the unemployment rate in construction remains higher. it makes a lot of sense that the borrowing costs are low right now for a project like that. so that is one item. extending unemployment
2:22am
compensation for people who are out of work through no fault of their own. if you go back to the congressional budget analysis that is one thing that would have a dramatic -- dollar for dollar an important economic benefit. it is not just to help the families that are out of work through no fault of their own get enough money to pay their bills, it is good for everybody. those are people who are on extremely -- extremely tough circumstances. for every dollar they get they go to the shops and buy goods and services. that is why it has an important economic benefit. those two items are important. i mentioned an extension of the pay roll tax holiday that also has an important economic benefit. we're talking about 160 million working americans with a little bit more money in their pockets to go out and spend. so, you know, i think those items all remain an important part of the conversation. i think they are going -- they are priorities. >> we're going to go to corey.
2:23am
>> i understand your democratic concerns to cuts of social security. if the president and the speaker reach a deal do you plan a passage to the house of representatives? >> until you reach a deal you can't predict what will pass on the republican side or the democratic side. i think the president -- i think democrats are confident of the president is fighting hard for the priorities that he ran on and the priorities he won on. but every member of congress reserves the right to look at
2:24am
the agreement and decide whether to support it or not. just to clarify again, the president has put forward proposals on cuts. he has $600 billion in additional cuts and savings beyond the $1 trillion that was part of the budget control act. his bucket has more -- the budget he submitted last year, has more medicare savings over the next 10 years than the ryan republican budget had over the next 10 years. it suggests that the president isn't prepared to make cuts and do savings. it is that our republican
2:25am
colleagues don't like the way he has done it. i do feel a little whiplashed on this medicare issue. i think all of us remember four weeks ago i think it was, we saw all sort of republican and romney ads beating up on the president for saving too in medicare. now the criticism is that he is not prepared to do more. the difference is the republican definition of medicare reform is not to reduce health care costs overall, not to improve coordination of care, it is to transfer rising health care costs on the backs of seniors. we think we should get it, the bigger issue is rising health care costs overall in the private system as well as the public medicare and medicaid.
2:26am
of course, medicaid has the lowest increase per capita cost in the major health care systems. >> two questions. the focus has been among democrats on taxes. what do you make of the suggestion that democrats take this opportunity to talk about entitlement reform and make it on their own terms? and then, looking into the next congress, what do you want to see from your party? what do you think should be done? i know we'll so a lot of policy transfer over, of course, but are some of your focus items? >> what was the last part of the question? >> what you would like to see in the next congress? >> on the -- first of all, let's remember the fiscal cliff has defined the kind of issue before us, right? the fiscal cliff contains $5
2:27am
trillion in revenue, just a side here, if the fiscal cliff were to allow to happen and we want to make sure it doesn't, we would over the 10 year period overachieve on the simpson bowles goals. we would overshoot them. now, we don't want to do it that way because it too much, too fast, and in the wrong way. the other component in the fiscal cliff is the sequester cuts. so that's why you see the president's proposal lined up as it is. it has $1.6 in revenue aton of the cuts we already did. in terms of -- just in terms of entitlement reform, i want to go back to what i see is a different philosophical
2:28am
approach. we began this effort in the affordable care act. we did save $116 billion. how did we do it? we ended the overpayments to the private insurance companies. they were being subsidized on average at 114%. we also began to change how we reimburse providers to encourage them to provide better care. we're dealing with dual eligibilities differently. the united states spends 18% of our g.d.p. on health care and its rising. there are not measurably better health care outcomes. our point is, we need to reform the system by modernizing the infrastructure.
2:29am
so you do need to move away from it. that's what we're doing but that's a different approach than transferring rising health care costs on to the backs of seniors. it doesn't do a thing about the underlying issue which is the rapid rate of health care costs throughout our health care system. if you take a senior, in the medicare program and give them a voucher and put them in the private pay program where per capita costs are going up. they have to eat all of those rising health care costs. that is the way that the plan saves money. so we are in favor of finding ways to reduce long-term health care costs. we have to do that. but we don't think you have to do it by transferring those costs on the backs of seniors. the medium income of a medicare beneficiary is $22,000. the president's plan, by the way, if you look at the out years, he does have some means testing. this has been on the internet for over a year. but for people who are around $22,000 income -- if there are better ways to save money in the system, we should. now social security, again, i sort of laid out the challenge, it is 100% solvent until 2033 if we did nothing it would pay 75 cents on the dollar. so yes, we should act sooner rather than later. but we should not be raiding social
2:30am
security which is owed in other words to deal with a deficit problem that at least right now was caused by two unpaid wars, a prescription drug plan that was not paid for, and tax cuts that benefit the wealthy. that's why the president's layout is planned the way it is. down the road, immigration reform has to be an important part of the work we do in the next congress. i hope we do more on energy issues across the board. and finally, i think making sure the united states remains competitive in what will be as the world economy recovers, which we hope it will, we have to invest in our people, education, our science. other countries are copying the
2:31am
model we used and made very successful. we need to do immigration reform and make sure the u.s. is competitive. >> jackie? >> i wanted to ask about several areas where the democrats leverage might not be so great. on c.p.i. and the medicare retirement age. how does the president say no to those when we came to know in july 2011 when he was negotiating with the speaker he agreed to both of those in exchange to higher revenues. the second one would be on the state tax but the democrats are split on that. i'm curious as to what -- ok, medicare age and c.p.i., the state tax and the payroll tax or its equivalent. i wound what the equivalent is. >> on the payroll tax cut or its equivalent.
2:32am
as you know in the december 2010 tax discussions, we agreed that we would replace what had been the make work pay tax credit and that moved into the payroll tax cut holiday. so there are other ways you can design a similar tax benefit over a short-term. i stress this would be on a short term, one-term basis because the economy is very soft, very fragile. this means taking a substantial amount of income out of people's pockets if we don't extend the tax holiday or the equivalent. the main reason it is designed in the payroll tax cut because it is an easy delivery. there are other ways you can do it but they are more burdensome. but the idea is to make sure we
2:33am
get the equivalent or as close to the equivalent economic impact. i stress as i do with my colleagues, with the social security has told us not one penny is reduced from the social security trust fund. in other words, this doesn't take one penny out of the social security trust fund because penny for penny the dollars that do not come in the trust fund come from a direct general transfer, that is just dollar for dollar.
2:34am
i think people would be willing to accept it on the democratic side on a one year basis. i think we could get support for it. in terms of the state tax, the overwhelming majority of democrats think we should go back to what has been considered the 2009 compromise level which was the, again, the most generous state tax benefit -- estate tax benefit since the late 1920's. it was a republican president teddy roosevelt who said we don't want to become a european-style country where people get ahead based on inherited wealth. i would think that we would want to borrow from that vision of america that we're not going to have a country where you get ahead based on the wealth of the parents you are born to. a $5 million individual exemption and a $10 million for a couple is -- we don't need to do that and bring down the 35% rate.
2:35am
there was 3.5 million exemption, 45% rate and that was generous rate. again, i think overwhelming the democrats support that compromise and again, it is hard to imagine republicans threatening to hold up middle class tax cuts because they want to get this super sweetheart tax deal for the very wealthiest estates of the country. on the other, obviously, there was no final agreement, first of all, back in december. there were a lot of moving parts, there are a lot of different versions that what happened there. obviously those items were part of the discussion. but we have had an election where these issues and these contrasting priorities were very much a part of the debate
2:36am
throughout the election as well as in presidential debates. so, you know, that obviously has, you know, changed the nature of the discussion, you know. that being said, the president is -- obviously he's in the middle of negations. my point that i'm trying to make this morning, there are better ways to achieve the same kind of savings in medicare and elsewhere then to simply transferring the cost to the seniors which is what the change in medicare would do. >> we have a couple minutes left so let's go to paul. >> i want to talk to you about
2:37am
the elections in virginia but in answering jack's question. are you suggesting that the speaker wants to wait until he's re-elected until he makes a concession to the white house? >> what i'm concerned about and this sort of segway out of the question about the rule, you know, my view is -- a deal that would be perceived by the vast majority of the country that would be reasonable that involves compromise on all sides where the speaker may not be able to get, a majority of republicans in his caucus to
2:38am
vote. we could get that kind of deal fun before the end of december and avoid going over the fiscal cliff. but the risk for the speaker, of course, if he brings to the floor of the house a bill that does not have a majority of republican votes that could create more churning within his caucus and meaning that he doesn't get the votes necessary on january 3. so the chronology here of course is the speaker does not get sworn in until january 3 which is three days after we begin to go off the cliff. that was the concern i was
2:39am
expressing. i hope he wouldn't avoid the tough decisions simply to take us into january and after his swearing in. but i'm becoming increasingly worried that is exactly what is going on. >> in virginia, we have a big election coming up for governor. but the states gone for obama twice now, things seem to be changing over there, and you have a well-known democrat running. how do you see that race unfolding and is it still a -- >> do you mean -- i think the last election showed it was not. as you indicated, even though mcdonnell won the president -- >> your party got hit pretty
2:40am
hard. the'm sorry you mean in mid-term. >> yeah. >> i don't think that is a bell weather. we got hit hard for a whole variety of other reasons principally being that -- the democrats were still in charge of the white house, the senate and so it was difficult -- the republican argument was pretty trade forward. if you don't like the way things are going there is only one party to blame. right now you still have
2:41am
republicans in control of the house and they seem to be doing a pretty good job of keeping their popularity rating low. i try to offer some ways they can increase their national popularity rating but that does potentially, you know, you've all written about this, that does means certain republican members in certain congressional districts may have to put themselves in a little risk for their primaries for the good of the country and i would argue for the good of the national republican party. >> two last questions. >> i have one quick question.
2:42am
you talked about the payroll tax holiday. they haven't answered questions about whether they are supporting that extension. is that your impression that one year extension they will support it? and in the process, people have talked about that the president and the republicans should shiites in a room -- sit in a room and talk about it? >> my understanding is that it was on a list of things they want to include but i think the only way to find out for sure is to ask them, again.
2:43am
i do think they recognize the important economic benefit of either extending the payroll tax cut or its equivalent as we talked about earlier. in terms of communication, i don't think that is the issue right now. as you know, the president met with the speaker of the white house over the weekend, they have been on the phone, there is now communication. it is just a big difference in opinion on how we should proceed. so that requires a willingness to compromise to move beyond the positions and it is not helpful when speaker boehner goes to the floor of the house and asks for spending details. as i mentioned the president has
2:44am
more spending details on the internet an in his documents than speaker boehner has in this three-page letter. this is it, right? $900 billion in mandatory spending and another $300 billion in discretionary spending. that's it. the president has a whole slew of things he has talked about. i mentioned his medicare savings, not passing the costs to medicare beneficiaries but asking for rebates from drug companies and other things. so the president has been very specific, it is time for the republicans to let everybody know what they are proposing. put theirs on the internet. >> i want to end with a different topic, more about politics. you talked about you have two new counties in your district and the next congress is going to start the next 10 years of districts. it does not look like it is going to be a good year for democrats. it looks like barring the side of national wave you had in 2006 and 2008 democrats have an uphill battle get back into the majority. do you agree with that? do you disagree with that? >> number one, we think we can get there. we think we can pick up the majority. as you know, we picked up the final count, i think was eight seats in what turned out to be a, sort of non-wave election year. the president did really well but it wasn't a wave election. you are right that, you know, that in the sense that republicans used the
2:45am
redistricting process to their favor. however, i don't think that is going to overcome the fact that the positions they have staked out on issues are so far to the extreme right of where the american people are. democrats have a big opening with independent voters. what happened in 2010 is that the democrats lost a lot of the independent voters that came out and supported the president as well as democratic congressional candidates. in this last election, the president has gained back a lot of that ground within independent voters. and if republicans keep threatening to bring down the economy by not, you know, not paying on the full faith and credit of the united states and, you know, keep their current position where their priorities are to provide tax breaks for the wealthy individuals at the expense of the rest of the country. i think you are going to see more and more independents as
2:46am
well as moderate republicans rethink their position. in addition to the fact that republicans have staked out such extreme positions on things like immigration, marriage equality, and other issues. they are losing the generational battle on those important issues. so i think democrats have a real opportunity to pick up a majority because that's where i think the country is. look at the democratic caucus in the house. look at the republican caucus in the house. ask yourself, which one is america minute that church? it is the democratic caucus.
2:47am
whether it is younger voters or other voting groups within the country. i think they all see their future is with the democratic party. >> thanks for doing this, sir. we really appreciate it. >> thank you. >> sorry about that. >> a look at the social security program and the fiscal cliff negotiations. tea party leaders had a news conference. later, a former adviser to president clinton discussed the u.s. economy appea. >> the senate small business committee holds a hearing today on hurricane sandy that looks at assistance for small businesses affected by the storm. we will hear testimony from small business officials.
2:48am
live coverage gets underway at 10:00 a.m. eastern time on c- span 3 and c-span.org. >> i want to explain how it happens. we do know the story of the cold war. we know the documents. we have seen the archives that describe relationships. we know the main events from our point of view. we have written them. what i wanted to do is show from a different angle, from the ground up, what did it feel like to be one of the people subjected to this system. how did they react in behavior? it is interesting. one of the things that has happened is what we called eastern europe is very
2:49am
differentiated. they no longer have much in common with one another. >> more on life and soviet east germany sunday night at 8:00 on c-span's "q&a." >> punched me, to me, take things from me. >> he is not safe on that bus. >> i have been on that bus and they are as good as gold. >> all of us were starting to see people coming out and talking about their experience of this phenomenon that so many of us have experienced in one way or another and have no words for, other than adolescents. finally, people are starting to stand back and say, this is not
2:50am
actually a normal part of growing up. this is not a normal right of passage. there was a moment where there was a possibility for change. we decided to start the film out of that feeling that voices were bubbling up. coming up to the surface to say, this is not something we can accept any more as a normal part of our culture. >> the filmmaker has followed up for award winning film by gathering essays. -- her toward women -- her award winning film by gathering essays. >> the fiscal cliff negotiations, with particular attention to social security.
2:51am
we spoke to an associated press reporter.
2:52am
host: our series on the fiscal cliff continues this morning with a dive into social security. here to talk about the program and how it is involved in the discussions, the negotiations over america's financial future, is stephen ohlemacher, joining us from the associated press, where he is a reporter. how much social security do people get? guest: a little more than 66 million people. the average benefit is a little over $12,000 -- a little over $1,200 a month. maybe $13,000 a year or so. host: we are talking about retirees and the disabled. guest: a fairly wide group of people receive social security benefits. retired workers, spouses, children, disabled workers, widows, widowers. a big safety net of people. host: retirees receive about $1,200 a month on average. the benefits for the disabled, $1,100 a month on average. how does social security get financed? guest: it has been a self-funded program since its inception. it is funded by payroll taxes. there's a 12.4% tax on wages up to about $110,000. if you make more than that, any money you make over that is not
2:53am
taxed as part of social security. the tax is divided equally between your employer and the worker. for the past two years, the workers' share of 6.2% has been reduced temporarily to 4.2%. as the temporary tax cut that went into effect over the past two years, than is saved workers an average of $1,000. host: you can see where the money comes from in this pie chart. payroll taxes making up 83%. also, interest and taxation of benefits. what are some of the other numbers we are seeing? guest: what you are seeing is the interest is from the trust fund. when the last time so security was overhauled in 1983, but put in a system that generated more money in tax revenue than what was being paid out in benefits. a trust fund was built up. that stands at $2.70 trillion right now. with social security had the additional money, actually held by the treasury, they invested in treasury bonds. treasury bonds earn interest there that's where the big portion of your income for the trust from guns from, interest. and if you get benefits above a certain amount, that is also taxed. host: the social security trust
2:54am
fund, for old age and survivors insurance. the also see disability insurance. guest: social security is not just a retirement program, it's also for disabled workers. if you are disabled, if you have a disability that prevents you from working and that condition will last at least a year, then you can apply for it and get social security disability benefits as well. it's not easy to get them. that program is a lot more complicated than the retirement program. so it is a social insurance program. it's not just a retirement program. host: how does social security factor into the fiscal cliff
2:55am
negotiation process? guest: the republicans put forward a plan in the last few weeks to change the way the annual cost-of-living adjustment is calculated for social security beneficiaries. the cost of living adjustments, known as the cola, it's the annual increase in benefits people get in their monthly payments. this coming year, next month in january their scheduled to get a 1.7% increase in benefits. that is based on a government measure of inflation, the consumer price index. specifically for so security, they use the consumer price index for urban wage earners. there's a new measure of inflation that the government has been considering for while
2:56am
called the change cpi. on average the social security administration tells us the cola would be 0.3 percentage points less than what it has been. so the 1.7% increase coming in january would be about 1.4%. last year the increase was 3.6% during that would be about 3.3%. that is the biggest effect of adopting this new measure of inflation that republicans put on the table. the reason why we have been focusing on this and many advocacy groups for older americans have been focusing on this, the president -- i would not say he agreed to its, a year-and-a-half ago there were in deficit talks and the talks fell apart. he put on the table the idea of adopting the change cpi. and the speaker of the house supports it now. it makes it in play. our other political dynamics on capitol hill that make it a lot more difficult to adopt. this is a very subtle thing to
2:57am
do to change the way the government measures cpi, but it has far ranging effects, effect that go far beyond social security. if it is projected to raise about $200 billion over the next 10 years. if they adopted it across a whole government, it would affect taxes over time. every year our tax brackets are adjusted for inflation. if they are adjusted a little less each year, as you make more money, you would move into a new tax bracket and you get a tax increase. it's about $60 billion tax increase over the next 10 years. it could affect anti-party programs. the amount of money that you can make and be under the party line is adjusted each year for inflation during that would go up less each year, and that would mean fewer people would qualify for anti-party programs. -- for anti-poverty programs. the idea saves money.
2:58am
not that much money a first, but it saves a lot of money over time. all over $200 billion in the first year and more after that. advocates for older americans don't like this idea very much. the savings are so big and that means they're getting less money each month in their benefits. host: there's the question of what it would mean for retirees, beneficiaries right now, in the next couple years, and in the future. and the proceeded of what it would mean across the government. what do democrats a about this? guest: congressman larson, you heard what he said about includes lulz security in these talks. that is a common belief among democrats on the hill, in the house and senate.
2:59am
it would be a very hard sell. one of the things i have been seeing since the talks started is a lot of focus on whether republicans would agree to raising the tax rates. if they ever did, what gets lost in the discretion is what democrats would have to give up. presumably, republicans would want deep cuts in entitlement programs. it's not clear democrats would be on board. senator harry reid in the senate has said social security should not be part of this. so has nancy pelosi, the democratic leader in the house. host: does the cola change depending on where you live in the country? guest: it is across the board for everyone. it is a percentage. it depends on how big your benefits are every year. you cited average numbers of about $1,200 a month for a retired worker. a lot of people get more and some get less. the dollar amount for your
3:00am
increase would change depending on that, but the percentage increase is the same a matter where you live in the country. host: we are talking about social security and how would factors into the so called "fiscal cliff." if you would like to join the conversation, here are the numbers to call --
3:01am
3:02am
3:03am
3:04am
3:05am
3:06am
3:07am
3:08am
3:09am
3:10am
3:11am
3:12am
3:13am
3:14am
3:15am
3:16am
3:17am
3:18am
3:19am
3:20am
3:21am
3:22am
3:23am
3:24am
3:25am
3:26am
3:27am
3:28am
3:29am
3:30am
3:31am
3:32am
3:33am
3:34am
3:35am
3:36am
3:37am
3:38am
3:39am
3:40am
3:41am
3:42am
3:43am
3:44am
3:45am
3:46am
3:47am
3:48am
3:49am
3:50am
3:51am
3:52am
3:53am
3:54am
3:55am
3:56am
3:57am
3:58am
3:59am
4:00am
4:01am
4:02am
4:03am
4:04am
4:05am
4:06am
4:07am
4:08am
4:09am
4:10am
4:11am
4:12am
4:13am
4:14am
4:15am
4:16am
4:17am
4:18am
4:19am
4:20am
4:21am
4:22am
4:23am
4:24am
4:25am
4:26am
4:27am
4:28am
4:29am
4:30am
4:31am
4:32am
4:33am
4:34am
4:35am
4:36am
4:37am
4:38am
4:39am
4:40am
4:41am
4:42am
4:43am
4:44am
4:45am
4:46am
4:47am
4:48am
4:49am
.
4:50am
4:51am
4:52am
4:53am
4:54am
4:55am
4:56am
4:57am
4:58am
4:59am
5:00am
all the sudden they have taken the steam out of what the greatest economic miracles. the thing that they had, an economy growing rapidly, is fragile and requires government to facilitate rather than later costs and uncertainty on top of it. it's almost like a test tube in the u.s. now. there was a time we had a huge amount of uncertainty. we have had a very aggressive regulatory agenda which has caused a huge amount of
5:01am
uncertainty in health care and energy costs. we have not made investments we could have made. but not made education and infrastructure investments. add all that up and you have a time in which american businesses are operating under a huge weight. while things go forward, conditions under which it could be maximized and in which the government creates conditions in which businesses and scientists can have the intellectual property and freedom to get their work done. >> that is an important thing to think about. there are things government can and cannot do. among the things government can do it is create conditions under which as much cost and uncertainty is listed in order for business to innovate. correct one of the statistics i have looked at had to do with reducing regulatory barriers. i thought this was amazing. u.s. firms with less than 20
5:02am
employees spent 36% more to comply with regulations the larger firms. and the small start-ups, that is what we are all looking for as we look for the next big economic success story, those that may have been around for awhile. at google we look at what a web presence can do for start up as they increase their potential and throughout the world in terms of global exporting, their ideas and innovations. regulatory barriers have such a depressing impact on their ability to get the job done, that there's something government in do that does not have any impact in terms of the cost and produces benefits in terms of [indiscernible] >> once we get through the fiscal cliff, this a very clear innovation agenda that is in front of us.
5:03am
i think we will have the conditions as a result of the fiscal cliff behind us and the election turning out the way it did to get at that. the first will be immigration, i hope. it will create -- the whole immigration problem. a lot of people say how will we compete with china's population? we could have the entire world at our disposal in with the best people of the world can come to the u.s. >> and stay and start businesses. >> the corporate tax reform, have a system which is simpler and promotes efficiency and makes it easier for american businesses to compete in the world. third, -- and that efficiency will be enormous. third, there is an infrastructure investment that needs to be made. this is important. in the context of the kind of budget deal we will get, we will be spending less. we have to think about what our
5:04am
values are as rwith respect to what we spend money on. the most important to spend money on its infrastructure. make investments in the future rather than short-term spending. and support for research, basic research, and higher education, and education. if government does that and that creates some degree of certainty with respect super -- just tell us what we will be and we can plan around it -- with respect to energy costs. i think we will create the conditions under which businesses in the u.s. will be able to create a renaissance of american competitiveness. >> that's a brilliant agenda. i think we would all agree that as a distinguished alumnus of harvard said that years ago, washington is a town with charm
5:05am
and southern efficiency. i don't think that has changed. let's assume we go through the fiscal cliff, immigration, corporate tax reform, and investments. immigration, you are not going to do just a dream act, but you have to do a comprehensive immigration or you don't. george bush, john mccain, ted kennedy. then they decided to sabotage it. republicans of learned a lesson this time, but i'm not sure how much. corporate tax reform, i covered the 1985-1986 act. that was financed through corporate tax increase. they had the most skillful treasury secretary. people on both sides willing to work with the white house and congress. third, when you talk about infrastructure spending, investments, and things we done with n.i.h and national science foundation, all the talk now is about debt. so how do you do what they
5:06am
envisioned? >> once we get over the fiscal cliff we will have the discussion on the debt ceiling again in january. >> story. >> so we're not calling to get away from somewhat of a doomsday scenario for quite some time, which would allow his position. but i do think it is important, because the priorities that glenn outlined are not partisan. people don't have this agreement as to whether the federal provincial and everett bollin immigration. we may disagree on where we want to go on that. federal government having a role in infrastructure. there are larger conversations out there wycherley to divide the partisan terms of what is government's role and what is not. we all accept these are government goals. the debate as to which side you take. i think what's he has talked
5:07am
about is how do you get there. the bottom line is the u.s. congress and this white house are very disjointed, because the american public is very disjointed. when the american public -- this is a town that is responsive to what their voters tell them. people don't come here and say i will disagree totally with what my constituency tells me to do. once in awhile we would hope when it requires leadership because they get more from patients and their constituents that they rise to the occasion. but i think what is important if we are going to get to that point of these five things that need to be done in order to pull the country forward, more people need to talk about. having him on this panel enunciating those four or five things is important. it is a campaign that needs to be waged, that allows people -- probably in the centers of all
5:08am
political parties, however many that is these days, to have that conversation. it is a lonely center. to be able to have that conversation, to enunciate it. it is something that needs to be talked to and explained in terms of what needs to be done. i don't think it is something that will happen tomorrow. by the end of next year, i think political parties are scared enough about how tumultuous politics is. the pendulum swinging so much more rapidly than when we started in this business of being in politics or covering politics, that i think they will respond more quickly if we can get that message out. it's been so long since we have had this discussion. we talk about debt and deficit, which is important and because we talk about balancing the budget, not just talking about the government investing in what r&d and infrastructure needs. the conversation as to take
5:09am
place again so when legislators make it a priority they will be applauded by constituents. >> for understandable reasons, the dialogue issued also all has been incredibly important efficient government. 20 years ago you were in congress. the n.i.h. was doubled. the budget was doubled over 10 years. i don't know anyone who would argue that was anything but a great investment that helps the american economy. that is not part of the dialogue these days. >> the value of the nih dollar is 90% less than it was. the doubling was critical. had it not -- now they're urging we try to do nsf and other science agencies and doe and doubling it in 10 years or so, which i hope can be done. we are drifting below 2.7% of r&d as a proportion of gdp.
5:10am
economists say the best thing is 3%. we are not moving in the right direction. i am a first-generation american. my father got here in 1926. partly because he owns a patent in austria. it was bought by a company in ohio that later became part of rca. he did not add a penny to his name. this little company in ohio paid his boat ticket so he could get here in january of 1926. he did not to go into that business, unfortunately. he became a psychiatrist. [laughter] nonetheless, in his own way he was part of the great american middle class in the 20th century. so this is not just about rich people. immigration, intellectual property, and creating the conditions of wealth.
5:11am
it really does lift all boats. i want to go back to the humanities. i'm reading a very interesting book called "to iron curtain." one of the points she makes is in the attempted sovietization of central europe for 1944 through 1956, they tried to empty out the university's and historians and philosophers. they were pretty effective. they got them to go west. for the exiled them. not only in the soviet union but in central europe and eastern europe. they encouraged more science and engineers. but they would not create an environment where they could really do good work. the founders would have known this, you cannot just be a scienc -- scientist or engineer to look way over the cliff and
5:12am
over the mountains and beyond. a great state university is talking about creating incentives for people not to have science and engineering as undergraduates. you have to have people who are imaginative and can look beyond the current crisis. that also has been part of the middle class, new ideas. >> i agree. i would like to say more of an emphasis on science and math. in terms of k-eighth grade, so younger kids can look up to those role models. >> one of the great stories a young physicist in the 1950's at places like berkeley, they started going back to questions
5:13am
of uncertainty and they became more philosophical. this created the opportunity for whole new areas of physics in the 1970's. if you are just doing problem steps, you are not thinking about the deeper ideas, you are not setting up the framework for thinking intellectually about well beyond the cliff to the future. >> a question? >> i do. you want to pick up on any event? >> one thing. i fear that we have a burgeoning student loan problem in our country. it is the only form of consumer debt that has increased substantially during this recession. it is by definition subprime, because people don't have jobs. if you actually look at it on a [indiscernible] basis, many student loans are similar to the subprime mortgages, interest only, and
5:14am
that type of thing. very high default rates. i think it's great. i studied of this in the social sciences at harvard. i worry about the kids who are getting art appreciation or literature courses in universities that don't have the same level of prestige and they cannot get jobs afterwards to repay their student loans. so i think it is very important, if you have a good idea, to able to communicate it, so the social sciences and humanities are very important. we also need to think about people being able to get employed. people going, schools besides berkeley and harvard and stanford. so they can have a personal balance sheets that allows them to prosper in life.
5:15am
>> that piece of it needs to be integrated into it. brac anybody needs to be able to think and to write. that comes in different spots dimensions and languages. that's what we get from a liberal arts education. >> harvard does a fabulous job. in many places the private institutions, but to which they feel they have to charge, kids will end up with a $100,000 debt or $150,000, while public education is cutting down. it is a terrible squeeze. >> some of the work being done not just at community colleges but at extension schools of some of the great universities to integrate -- we spoke about the danger of universities and businesses getting together earlier, but one of the things we can do, that is important outside the scientific innovation peace, technology
5:16am
licensing, is create the ability for schools at all levels to teach kids things that local employers need to be employed. then while they are there, teach them something about shakespeare and about the constitution and make them good citizens and engaged people. but give them skills that allow them to put themselves in the marketplace of the future. >> which is why community colleges have been such an engine for economic growth and prosperity in america. but we are cutting back on community colleges now. >> one of the mistakes we make when we talk about the full range of this, which is spending on research and development, support of universities, all these things, is that more money is better. if a business person says less money is better, more efficient you allocate your resources, the more you get from your research dollars, the better you do. today is far cheaper to start a
5:17am
business than it used to be in this country, because all the tools that you used to have to purchase yourself are not readily available on the web. it has taken the cost of innovation down enormously. there is a way in which, through the use of extension schools and also online education, there are important ways we can substantially reduce cost and reached many more people and create the opportunity for kids to get skills -- not just kids but also people that need to be retrained. education we think of as stopping in your 20s. but we have 40% of the workforce that have been unemployed more than a year now. that is a group that has to be retrained in important ways. so we can do that in a much cheaper way in a very different model with more connections to industry. at the best universities, not just a minute to colleges. >> one of the statistics are
5:18am
brought with me was -- obviously we are spending more money on education, particularly in the primary schools, and yet our science and math have flat line. we have not seen an increase in terms of the flight line, in terms of doing the same thing they've done since the 1970's. i'm not that familiar with education x -- or ed x. google is investing in stem education to see what we can do better. the big frustration, when we talk about education and many of the other social problems, when you see that there has been such a dramatic technological change and yet we have not really done anything to increase our education system. are there ways we can do things a little differently, particularly in the pre-k troops elementary school so we
5:19am
can see if we can use these on- line resources to reach more kids, to get them to think beyond, to do the type of things you are talking about, to introduce them to world beyond our borders. -- pre-k through eighth grade. to cut some of the costs by allowing kids to enter world's and drums that they never had been allowed to enter before through technology. i think we need to really spend more time figuring out how we have changed that paradigm, particularly for the pre-k high school, but even in college. how can we learn better, based on what we know today. >> steven moore before we open it up to question. glenn mentioned corporate tax reform earlier. warren buffett says that tax rates don't matter of as much as a lot of people pretend, when it comes to companies that and
5:20am
investments and innovation. i suspect you disagree with him. >> it seems at odds with the buffett rule, which suggests that taxes are important. >> for government to have revenue? >> business people oftentimes say that it does not matter. then you get one level of analysis beneath that and they wake up, which is that you are given a spread sheet. if you're on a board, you are given a result. in the calculation that creates that result, there's a whole lot of things like taxes and other costs. if you run sensitivities on analyses based on different formulas you get different outcomes. it's not that it's not important, but you are looking at a broader conclusions rather than getting into the actual details. >> to encourage innovation, what
5:21am
would you do? >> taxes are imbedded in the analysis and people just don't recognize it. second, we have a corporate tax code. one of the real opportunities we have in the budget deal is to get the revenue today and then be able to deal with reforms that are revenue neutral tomorrow. both for individual and corporate taxes. no one's talking about getting the revenue from corporate taxes. the corporate tax reform is all about competitiveness. we have a whole bunch of features of the corporate tax code which significantly influence corporate behavior. it's not about revenue. it's about a tax system that's been there since 1986 and the result of which every year something has been added. it's like a victorian house you purchased and has three different plumbing systems and four different electrical systems and nobody has bothered
5:22am
to take them all out. did you do a gut renovation and go back to what we did in 1986. purpose is what happens in participatory democracy. everybody talks about the cash. a lot of this cash is offshore. $2 trillion of cash and 90% of corporate assets over history. most of that is sitting offshore. it is a disincentive for american countries -- companies to bring it back on shore. it's an example of a very big outcome difference that has occurred over a significant period of time as a result of the way the tax code is structured. that's not the ideal thing from a theoretical point of view if you want to bring the cash back to invest it in research and development, new employees, tax expenditures, whatever you might do, in the u.s., to promote innovation. one of the things it does, you see a lot of american companies, particularly technology companies, purchasing foreign
5:23am
companies, because they're using a 55 cent dollars to make acquisitions, because they can use the offshore cash to buy something offshore. so it also reduces the value of certain technology companies that are started today and might want to be acquired by a large company. so there is a distortion that would not be ideal. >> one final question and then we will open up to everybody. what are couple things you would like to see? see don't we talk about taxes, education, solving the current fiscal. but what other areas do you think government could do to better encourage and facilitate innovation? something's doing positively or getting it malaga way. >> i will not talk about spending more money, although i would like to see a little more investment than the 1.4% that is in the president's budget for
5:24am
r&d over all. i wish it was more than that. i knodon't know how to get more money. there's one thing government really can do and what our elected officials and political leaders have not done very well in many cases in the last 10 or 15 years or so. that is to say good things about science. particularly in the life sciences. we have gotten into a situation , unlike physics and engineering they did 40 years ago, life sciences has become a cultural cla. flashpoint. we have a convergence of chemistry, biology, engineering, artificial intelligence, cyber, and so forth, that requires we have a strong life sciences base. there has been some issue in the life sciences with respect to stem cell issues and so forth, but i think that really has
5:25am
discouraged people in the sciences, even if they don't work in those controversial areas, with a feeling that the leadership is not saying the right things about the importance of science for the american future. >> perhaps encouraging them to go elsewhere. greg there are some young scientists, including places like harvard, that it made a career decisions with respect to certain fields in the life sciences because they feel as though there may not be a future in those fields. >> we have time for a number of questions. does someone have a microphone? >> i do think when we talk about what the government has to do in the up-and-coming year or two years, i do think getting over the fiscal cliff, getting closer to balancing the budget, still very important in the mindset of businesses and this government that we learn to do
5:26am
that. but i do hope, because of all the discussions, that tax reform is something that is taken seriously for this year. i think is well overdue. it's been something that should be done now. it does not have time to do it before december 31, but i think there's a real opportunity to make a lot of changes we have talked about the tax reform. it would give businesses a lot of the assurances they need that the government is paying attention to what they're saying. >> you should tell barack obama and jim baker. >> i have an idea. if you think about each time we reached a crisis point of enormous proportions in our country, there's been an institutional response. we had a number of financial crises in the late 1800's, the early 1900's, and we created a central bank. that has proved to be enormously valuable for the past five
5:27am
years and important. before that. post-world war ii when the international system broke down, we created a system. after 2001 when we had the horrible events of september 11 recreated the department of homeland security. i wonder if there's not an institutional -- >> some don't work as well as others. [laughter] >> that's what everybody was thinking. >> but it reflects our values and the focus of our government. so i am wondering if we should have a department of homeland prosperity, by which i mean, don't we need someone other than the president, who has lots to do, gets up every morning and has a statutory responsibility to think about american competitiveness, something we have taken for granted a long time because we were the premier economy and now we are being challenged and need a way to
5:28am
reinvent ourselves. you travel around the world and all those countries that have the highest growth rates have one of those. it's just a thought process. >> we have a bunch of questions. we have a microphone? the gentleman on the end. >> hi, with owners illustrated magazine. have a question for the panel and for the president of harvard. looking at demographic shifts, and i am very excited about this panel, because you are talking about innovation. i have a question in regard to the existent applications of your technology, especially when you are talking about people already using technology to boost awareness whether they are a musician and using google or youtube, how low day you see taking advantage of people who
5:29am
currently are not graduating at a high enough rate in k-12, but have the ingenuity? i have covered these people covered will wan -- like lil' wayne on google. how do you find alternative methods to provide access to people who currently are falling by the wayside but present a tremendous challenge moving forward to america's competitiveness a? this will be a demographic coming out where they were not able to apply to harvard right now. >> i think i cannot disagree with your underlying assumption. the ability to have youtube, performers who would never have
5:30am
been able -- performers, thinkers, people who want to just promote discussion, would never have had a platform before to influence. yet now with their and it's not notly -- not there and it's costly. i think this is something that will accelerate as our world gets closer and smaller. i don't have the answers to the equalization in education, but i do know somewhere along the line we will discover something that allows people -- in order to influence in a positive direction or negatively, but in order to influence, you have to have a channel of communication. we're now at a point where there is a channel of communication to almost everyone in this country via cell phone and an ability to really understand what that into, i don't know what that answer is and how you do it.
5:31am
that's why i was saying the conversation we have in terms of how we think and how we can use our mobiland other things to reach kids that might not have the structure that we have been thinking about its influence and before. so i could ask the same question. i don't know the answer, but i know the technology is there. someone has to do really social science discussion in terms of how to take advantage of it. but i do think the future will be pretty -- gives an opportunity for us to really tin-tin in terms of competitiveness again. with better equalization, we are getting closer to it than we were when i was growing up, with regard to the ability to access information's but also to get the message that the world is
5:32am
yours and you can do anything -- empowerment. >> music and technology, one of my interests. we have seen this happen before. like being crosby got to be a corner because the microphone changed. before that you had to be a high tenor. crosby got to be a crooner. then there was magnetic tape. you have to go to high-tech studios in l.a. or chicago or new york to record before that. people now can communicate with new technologies. i'm an old-fashioned guy. i still want all kids to come to a seminar on the campus for a while. i do, very much. but i'm also teaching a course next year and i'm trying to figure of how to get my 15 minute chunks on a camera and
5:33am
how to integrate that with a course that i teach at penn. \ >> a question? >> i'm carol thompson from strategic consulting. have a question for each of the three panelists. we have been talking about innovation, education, and we have been talking about what we have been hoping for the future. i would like to ask you about the future. what are your greatest fear is hand your greatest hopes for 2016 and 2020? small question. >> i presume you don't think the world will end on december 31. [laughter] >> susan will not say newt gingrich runs again for president. >> i am here in a whole different capacity now. don't come to be first on this.
5:34am
>> my greatest fear, i hope that both of my kids are all-employed within the next four years. they are doing ok, but they're in their 20s. my greatest fear -- i don't think about fears. i am surrounded by so many incredible kids that i feel good. if i feel bad in the morning, i feel good after my class. >> you stole my thunder. i would prefer the thunder to win over the heat. [laughter] i think couple things. one, i do think the fiscal
5:35am
situation is the facilitating opportunity between here and there. i really hope we are on a course in that time. to have our fiscal house in order so that we can then do the things we need to do to create prosperity. if we have not got it done by then, we have gotten worse off. that is my greatest fear and hope. second, one of the great things about being in this technology world is that you get to see the future. you spend your life thinking about the future. in the labs in the company's i visit today our products and services that are being developed to be introduced in the future. you are not thinking about -- if you are in an aluminum company, you are trying to think about
5:36am
how much aluminum you will make. we think about the future all the time and it is messy and complicated but it's a fun process. on the other hand, i went to the world economic forum of a few years ago and all the ceos of major technology companies gathered in the room talking about what they saw in the future. everyone of them was interested in a company called a second life which no one remembers and no one mentioned facebook. >> exactly. >> so you can see where the technology can take you in the future, but you cannot predict what form it's going to take. i hope enormously that that is what happens, which is some innovation we don't expect and some innovator, hopefully in a young lady trained in one of the great science curriculums in the u.s., will create something.
5:37am
and with the technology we have today but in ways we don't expect. theet's put aside all others things that need to be said in terms of iran, north korea, let's put all that aside. let me bring it down to something that i think we talked a little about today and is a little more relevant to today's discussion. what does keep me up in 2016 is the fact that i have seen through my lifetime women -- the face of women in society and business change. we are now at a point where women are the majority of graduates from most colleges. women are heading prestigious universities. 25 years ago they were not even allowed in. we are looking at medical schools that allow women to get
5:38am
ready to be. i was kind of joking when i said i thought the u.s. congress is now dominated and then i went into tech, but i really wasn't. the issue we have with young girls in math and science and protecting it out to 2016 and 2020. for all the advances we have had in becoming =, if not surpassing in certain areas, that when we get to a place where technology rules, and in so many ways in 2016 and 2020, technology will rule, it will rule education. this is the world in which we le-- live. we will be living with another glass ceiling that our daughters have to break through. that kind of makes me sad for my girls and for their friends. >> let's all we break through it. >> ending on a positive note. let me just say that this day to
5:39am
day we are brought to you by neera, susan, and the president of harvard, all females. [applause] >> my wife let me keep my maiden name. i want to thank all of you. six been terrific. everyone has been fun and informative and interesting. we also get to serve as advanced people. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> the senate small business committee holds the hearing today on hurricane sandy, a look at federal assistance for small businesses affected by the storm. we'll hear testimony from small business administration officials and local officials from new york and new jersey. live coverage at 10:00 a.m. eastern time on c-span3 and c- span.org.
5:40am
my inspiration was the idea i wanted to explain how totalitarianism happens. we do know the story of the cold war. we know the documents. we have seen the archives that describe roosevelt, stalin, churchill, truman. we know the main events from our point of view. we have read them and written them. what i wanted to do was show from a different angle, from the ground up what it felt like to be one of the people subjected to this system and how people make choices in that system and how they reacted and behaved. one of the things that has happened since 1989 is the region used to call eastern europe has become very differentiated. these countries no longer even have much in common with one another except the, in memory of communist occupation. >> war with pulitzer prize- winning anne applebaum on life
5:41am
in soviet east germany, poland, and hungry to from the end of world war ii 1956 from her restore local narrative. sunday night at 8:00 on c-span. [video] >> give it to him hard. >> is not safe on that bus. >> i've been on the bus. they are good as gold. >> all of us in this country are starting to see people coming out and talking about their experience of this phenomenon that so many of us have experienced in one way or another and had no words for other than adolescents, other than growing up. people are finally starting to go back and say this is not actually a normal part of growing up, not a normal right of passage. i think there was a moment where there was a possibility for change.
5:42am
the director and eyes decided to start the film out of that feeling that voices were bubbling up to the surface to say this is not something we can accept any more as a normal part of our culture. -- the director and i. >> and the filmmaker has gathered essays and personal stories together in "bully." saturday night, hear more. and like us on facebook. >> fed chairman ben bernanke announced yesterday that the fed would continue a low interest- rate policy and $40 billion per month in quantitative easing. he also noted the fed's decision to purchase longer-term treasuries. he made the announcement at a news conference following a meeting of the federal open market committee, and this is an hour and 15 minutes.
5:43am
>> good afternoon. 3 and 1/2 years since the economic recovery began. the economy continues to expand at a moderate pace. unfortunately, unemployment remains high. about 5 million people, more than 40% of the unemployed, have been without a job six months or more and millions more who say they would like full-time work have been able to find part-time employment or have stopped looking entirely. the conditions now prevailing in the job market represents an enormous waste of human and economic potential. a return to broadbased prosperity will require staged improvements in the job market, which in turn require stronger economic growth. meanwhile, apart from temper fluctuations largely reflected
5:44am
swings in and prices, inflation appears to run slightly or below the 2% objective in coming quarters and over the longer term. against a microeconomic backdrop that includes a high unemployment and subdued inflation, they will maintain the highly accommodative policy. today the committee took several steps. first, it decided to continue with purchases of agency mortgage-backed securities, initiated at the september meeting at a pace of $40 billion per month. second, the committee decided to purchase longer-term treasury securities initially at a pace of $45 billion a month after its current program to extend the average maturity of its holdings is completed at the end of the year. in continuing its asset purchases, the committee seeks to maintain downward pressure on longer-term interest rates in the key financial conditions greedy and to keep financial conditions accommodative.
5:45am
ensuring that inflation over time is close to our 2% objective. finally, the committee today also modified its guidance about future rate policy and to provide more reformation to the public about how it anticipates reacting to evolving economic conditions. i will return to this later. although the committee's announcement today specify the initial monthly pace and composition of asset purchases, it did not give specific dates and which the program may be modified or amended. instead the pattern of speaker asset purchases will depend on the committee's the tuition of incoming information in two respects. first, we expect a continued asset purchases until we substantial improvement in the outlook for the labor market in the context of price stability. in assessing the extent of progress, the committee will evaluate a range of labor market indicators, including unemployment rate, payroll employment, hours worked, and
5:46am
labor force participation, among others. because increases in demand and production are normally precursor to improvements for labor market conditions, we will also look carefully at the pace of economic activity more broadly. second, the committee will be monitoring the economic and financial developments to assess the efficacy and possible drawbacks of its asset purchase program. the federal reserve asset purchases over the past two years have provided important support to the economy. by helping keep mortgage rates historically low, for example. the committee expects a policy to continue to be effective and costs and risks to remain manageable. as the program continues, we will be regularly updating those assessments. if future evidence suggests the program's effectiveness has declined, or its potential unintended side effects or risks become apparent as the balance sheet grows, we will modify the program as appropriate. more generally, the committee
5:47am
intends to be flexible in varying the pace of securities purchases in response to information bearing on the outlook or perceived benefits and costs of the program. unlike the explicitly quantitative criteria associated with the committee's board guidance about the federal funds rate, the criteria the committee will use to make decisions about the pace and extent of its asset purchase program are qualitative. in particular, continuation a asset purchases is tied to are seeing substantial improvement in the outlook for the labor market. because we expect to learn more overtime about the efficacy and potential costs of asset purchases in the credit economic context, we believe the qualitative guidance is more appropriate at this time. in today's statement the committee also recast its forward guidance to clarify how it expects its target for the federal funds rate to depend on future economic developments. specifically, the committee anticipates that exceptionally low levels of federal funds
5:48am
rate that are likely to be warranted "at least as long as the unemployment rate remains above 6.5%, inflation over the period between one in two years and it is expected to be no more than 1.5 percentage point from blogger and goal, and a longer- term inflation recommendations continue to be well-anchored." this is different from earlier statement. following the september and october meetings, the committee indicated that it anticipated exceptionally low levels, the federal funds rate are likely to be warranted at least through mid 2015. the modified formulation makes more explicit its intention to maintain accommodation as long as needed to promote a stronger economic recovery in the context of price stability, a strategy that we believe will help support household and business confidence and spending. by tying future monetary policy more explicitly to economic
5:49am
conditions, this formulation of our policy guidance to also make monetary policy more transparent and predictable. the change in the form of the committee's board guidance is not implying any change in the committee's expectation about the likely future path of the apparel funds rate cuts since the october meeting. in particular, the committee expects the status threshold for the unemployment will not be reached before mid 2015 and predicts that inflation will remain closed to 2%. over that% thus, given the committee's current outlook, the chitin's introduced today is consistent with the committee's earlier statements that exceptionally low levels of the federal funds rate are likely to be wanted at least through mid 2015. let me emphasize that the 6.5% threshold should not be interpreted as the committee's longer-term objectives for unemployment. in the economic projections submitted in conjunction with today's meeting, the tendency of participant estimates of the
5:50am
longer running normal rate of unemployment is 5.2% to 6%. because changes in monetary policy affects the economy with a lag, the committee believes it likely will need to begin moving away from highly accommodative policy stance before the economy reaches maximum employment. waiting until maximum employment is achieved before beginning the process of removing policy accommodations could lead to an undesirable overshooting of potential output and compromise the longer-term inflation objective of 2%. as the fomc statement makes clear, the committee anticipate policy under the new guidance will be fully consistent with continued progress against unemployment and with inflation remaining close to the committee's two% objective over the longer-term. although the modified guidance to provide greater clarity about how the committee expects to respond to the incoming data, it does not put monetary policy on autopilot.
5:51am
in this regard, let me make several points. first, the committee reviews its current low rate policy as likely to be appropriate at least until a specified threshold are met. reaching one of those thresholds will not automatically trigger immediate reduction in policy accommodation. for example, if unemployment reaches 6%, they might recommend that the target inappropriate. in deciding when and how quickly to reduce policy accommodation, the committee will follow a balanced approach in seeking to mitigate deviations of inflations from its to% goal and dva it imploded from its estimated maximum level. second, the committee recognizes that no single indicator provides a complete assessment of the state of the labor market and therefore will consider
5:52am
changes in the and employment rate within the broader context of labor market conditions. in evaluating a given decline in the unemployment rate, the chemicals also take into account the extent to which that decline was associated with increases in employment and hours worked as a postal increase in the number of discouraged workers. the committee will also consider whether the improvement in the unemployment rate appears sustainable. third, the committee chose to expect inflation threshold in terms of projected inflation between 1 and to the years ahead president in terms of current inflationary the committee took this approach to make clear it intends to look through purely transitory it inflexions such as those induced by short-term variations in prices of internationally traded commodities and to focus instead on the underlying inflation trends. in making its collective judgment about the underlying inflation trend, the committee will consider a variety of
5:53am
indicators, including measures such as median, trim, mean, and core inflation, the views of outside forecasters, and the views of certain models of inflation, and the committee will pay close attention to measures of inflation expectations to make sure that they remain anchored. and they will monitor financial developments to make sure policy and is conducted in a manner consistent with our dual mandate. it is worth noting that the goals of the fomc and asset purchases and the federal funds rate guidance are somewhat different. the goal of the asset purchase program is to increase the near- term momentum of the economy by fostering more accommodative financial conditions. purpose of the rate guidance is to provide information about the future circumstances under which the committee would contemplate reducing accommodation. i would emphasize that a decision by the committee to and asset purchases would not be
5:54am
tied to a tighter policy. the committee would no longer be increasing policy accommodation, but its policy stance would remain highly supportive of growth. only at some later point with the committee began actually removing accommodations through rate increases. as i've discussed, the decision to modify the asset purchase program and to undertake increases are tied to two different criteria. in conclusion, the fomc actions today are part of our ongoing efforts to support economic recovery and job creation while maintaining price stability. as i've often stressed, monetary policy has its limits. only the private and public sectors working together can get the u.s. economy fully back on track. in particular, it will be critical that fiscal policy makers come together soon to achieve longer-term fiscal sustainability without adopting policies that could derail the ongoing recovery. thank you.
5:55am
i would be happy to answer your questions. >> i'm steve from cnbc. i have a lot of questions, but why are there different targets for qe and for the funds rate? what does that achieve? what good is a target if you have to make reference to a calendar dates in the statement itself? it's not substantially different from the calendar dates that we set in october. do you have to keep doing that to make it clear? and you have another paragraph after that which says it's not just targets, it is something else. so i'm not sure what could the targets are if you have to reference the calendar date and then say in the next paragraph it is not really targets. >> first, the asset purchases and the rate increases have different objectives than.
5:56am
asset purchases are about creating near-term momentum in the economy, trying to strengthen growth and job creation in the near term. and the increases in the federal funds rate target, when they ultimately occur, are about producing accommodations. hipaa different objectives. second, the asset purchases are a less well understood tool. we will be learning over time about how efficacious they are and what costs they may carry with them in terms of unintended consequences they might create. we will be seen what else happens in the economy that can affect the levels of unemployment that we hope to achieve. for that reason, we decided to make the criteria for asset purchases qualitative at this time, because there are a number
5:57am
of different things we need to look at as we go forward. rate increases are well understood. we understand the relationship between those with rate increases and the state of the economy, so we have been able to give more specific guidance in that respect. with respect to the date and the transition, we wanted to make clear that the change in guidance did not changed our 2016 expectation. going forward, we will drop the data and rely on the conditionality. if news comes then that the economy is stronger or weaker, then financial market and the public will be able to adjust their expectations for when policy tightening will occur without the committee having to go to the process of changing it
5:58am
state in a non transparent way. so i think that is beneficial. does that cover it? >> we will go to >> what prompted the committee to make the decision this -- at this specific time for targets? by taking an unemployment rate that is quite low compared to currently will shift the balance of priorities in terms of your dual mandate. it will be more in the direction of reducing unemployment rather than inflationary pressures? >> that's a very good question. we took the change today after a good bit of discussion. we had a substantial discussion of the threshold approach to our
5:59am
last meeting. we felt it was ready to go -- ready to put out. while there are different views and aspects of the threshold approach, there was a lot of agreement that having a more explicit connection between rate policy and the state of the economy was more transparent and helpful to the markets and the public than our date-based guidance. therefore, there was a general view, at some point, that we should switch to that kind of guidance. we hope it will be more helpful and give markets more information about how we will respond going forward. it is not a change in our relative balance towards inflation and unemployment, by no means. with respect to inflation, we remain completely committed to air 2% long run objective. we expect our forecast -- you